a) Explain the Phillips Curve.

b) You are given the relevant data (with description) for Australia in a spreadsheet in the same folder as this assessment (File Name: Unemployment-Inflation). These are at quarterly frequency for the 2013-2022 period. Analyze the data (Hint: plot the relationship of the two variables against time) to test the relevance of the Phillips Curve for Australia. 15 (5 + 10) Marks

DATA IS IN THE PICTURE.

B C D E F G H 1 Household saving ratio, seasonally adjusted Household saving ratio (%) 3 Dec-13 7.5 Mar-14 7.2 5 Jun-14 7.9 Sep-14 7.6 Dec-14 7.8 8 Mar-15 7.2 9 Jun-15 7.6 10 Sep-15 6.8 11 Dec-15 5.4 12 Mar-16 5.4 13 Jun-16 5.9 14 Sep-16 5.6 15 Dec-16 5.2 16 Mar-17 5.4 17 Jun-17 4.8 18 Sep-17 4.5 19 Dec-17 4.9 20 Mar-18 4.7 21 Jun-18 4.5 22 Sep-18 4.7 23 Dec-18 5.4 24 Mar-19 5.9 25 Jun-19 5.3 26 Sep-19 7.9 27 Dec-19 7.1 28 Mar-20 9.6 9 Jun-20 23.7 30 Sep-20 20.3 31 Dec-20 14.2 32 Mar-21 13.6 33 Jun-21 11.8 34 Sep-21 19.8 35 Dec-21 13.6 36 37 Source: Australian Bureau of Statistics, Australian National Accounts: National Income, Expenditure and Product December 2021